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DEEP DIVE: What is CDP?

Also check out our Sustainability Terms Glossary, where we’ll add key terms from each of our Deep Dives over time. Bookmark this page for future reference! 

Looking for information on Science-Based Targets? Check out our Deep Dive on SBTs here. 

In March 2023, the Science-Based Target initiative (SBTi) approved Atlantic’s SBTs for climate action, including our goal to reach net-zero greenhouse gas (GHG) emissions by 2046. As more companies are setting SBTs and submitting climate action information through CDP, we wanted to provide more background on the alphabet soup of climate disclosure and action. In Part 1 of this Deep Dive, we’ll dive into what CDP is and why it’s important both to Atlantic and our customers. Check out Part 2 on Science-Based Targets here. 

Why is climate action something Atlantic talks to our customers about? 

You may have seen mentions about how some companies like Atlantic are taking climate action at their customers’ request. But what does this mean, and why would Atlantic’s customers, like CPG companies, ask Atlantic to take action? 

The answer lies in how a company’s GHG emissions are calculated and accounted for.   

Companies typically report emissions under three categories, called Scopes. Scope 1 and 2 emissions are those that the company controls themselves, like on-site energy use and purchased electricity. Scope 3 emissions encompass other supply chain emissions, some of which come from the company’s suppliers. For example, when Atlantic sources packaging from a supplier, the emissions associated with making that packaging for Atlantic get accounted for in Atlantic’s Scope 3 emissions, even though Atlantic didn’t itself expend those emissions. (For more information on emissions scopes, check out our explainer video here.) 

For this reason, many companies’ climate action plans include work on reducing their suppliers’ emissions to reduce their Scope 3 emissions. Scope 3 often represents a large proportion of a company’s total impact, so it’s critical to address. For example, in 2021, Atlantic’s combined Scope 1 and 2 emissions resulted in about 20,000 metric tons of CO2 equivalents (MtCO2e), but our Scope 3 emissions generated about 480,000 MtCO2e.  

This pattern is common among other companies as well. Today, many consumer goods companies, many of which are Atlantic’s customers, are asking their suppliers, like Atlantic, to disclose and work on reducing their GHG emissions. They realize that the only way to take aggressive climate action is to involve their whole supply chain, so they can reduce Scope 3 emissions alongside their Scope 1 and 2. This is how Atlantic first began to disclose emissions through CDP, formerly known as the Carbon Disclosure Project.  

What is CDP, and why is it important? 

CDP, formerly known as the Carbon Disclosure Project, is a non-profit organization founded in 2000. The organization’s mission is to encourage companies, cities, states, and regions to disclose their greenhouse gas emissions and climate change-related risks and opportunities. CDP works with institutional investors, major corporations, and government entities worldwide to encourage transparency and accountability in reporting on climate change. The organization also provides a platform for companies and other organizations to disclose their climate change data and strategies, which can then be used to benchmark and compare performance. 

CDP’s platform is widely recognized as one of the most credible and influential sources of climate change data in the world. The organization’s annual reports and ratings provide investors and other stakeholders with valuable information about the climate risks and opportunities of major companies and industries.  

 

Companies that participate in CDP’s annual disclosure process are asked to provide a range of information related to their GHG emissions and climate change-related risks and opportunities. Some examples of topics companies are asked to disclose are:  

 

  1. Greenhouse Gas Emissions: Companies are asked to report their annual emissions of greenhouse gases (such as carbon dioxide, methane, and nitrous oxide) across their entire value chain, including Scope 1 (direct emissions from their own operations), Scope 2 (indirect emissions from purchased electricity), and Scope 3 (indirect emissions from their supply chain, business travel, and other activities).
  1. Climate Risks and Opportunities: Companies are asked to identify and assess the physical and transitional risks and opportunities associated with climate change, such as extreme weather events, regulatory changes, and shifting consumer preferences.
  1. Strategy and Governance: Companies are asked to describe their strategies for addressing climate change, including their emissions reduction targets, renewable energy plans, and other actions they are taking to mitigate their impact on the environment. They are also asked to provide information about their governance structures and processes related to climate change.

Companies receive grades from “A” to “F” based on the comprehensiveness of their disclosure and action on climate change-related issues.  A company that is thinking about using Atlantic as a supplier may make their decision in part based on our CDP score, and Atlantic may make a decision about a supplier we use based on their CDP score.  

In 2022, Atlantic received a “B” rating on the CDP climate change questionnaire, which is notably higher than average for our industry. This makes Atlantic more attractive for potential customers to work with since our Scope 1 and 2 emissions will affect potential customers’ Scope 3 emissions. 

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